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Optimizely to be acquired by Episerver

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Re: Optimizely to be acquired by Episerver

#21

Post by billyhoffman »

chundicus wrote: post #7

As someone not too familiar with the ins and outs of acquisitions or IPOs... is it unusual to get acquired after laying off a big chunk of your staff? Is that an indicator that they probably accepted a lower valuation than they would have before that layoff?

It can depend. Valuation is based on SaaS business metrics like Cost to Acquire Customer, Average Contract Size, Average Lifetime, and Margin.

Reducing headcount or doing a hiring freeze is a way to improve your metrics ahead before you go shopping yourself for an acquisition.

Re: Optimizely to be acquired by Episerver

#22

Post by cosmie »

jakemcgraw wrote: post #6

Just kicked the tires on Optimizely for a site with less than a million MAU. They wanted $50K upfront for one year. No monthly or quarterly billing available. Went with Google Optimize instead, works fine for free. In the face of that, very surprised Optimizely doesn't do month to month to get folks started.

Optimizely used to, but their sales strategy changed to deliberately reposition themselves in the market.

They've priced out self-service and smaller users, and repositioned their sales model for larger companies with immature internal capabilities. They lock you in with that annual pricing, and include enough margin to throw a massive amount of support resources at you to ensure you get everything fully off the ground and deeply embedded into your internal workflows.

As an early self-service user, it was really irritating when I tried to bring them into a new company I started at and realized they made that change. But after working for a major marketing agency for a while, I've realized that it makes sense for them (even if it sucks for my purposes). In the world of large scale brand marketing companies (such as CPG companies), even a rudimentary informational/branding/brochure-ware website tends to be a $500k+ abomination, involving a super complex IAT[1] consisting of 3-6 external agencies and internal teams. In that world, the single greatest cost for anything is the man-hours required for account management, since even the tiniest of thing involves so much coordination (both logistically and politically). Optimizely's absurd looking price bakes in the cost of providing that level of account management support as well as initial implementation/usage technical support. Without those, it's entirely likely that the brand could purchase Optimizely and it'll sit unused because the agency scopes don't account for it and no one is willing to eat the unscoped hours required to implement/support/use it.

[1] https://isl.co/2018/10/agile-iat-four-principles-for-better-...

Re: Optimizely to be acquired by Episerver

#23

Post by roasm »

richardfeynman wrote: post #19

I worked at Optimizely from before its series A in 2012 until the end of 2016, so I have a unique perspective on this. For most of the time when I worked at Optimizely, the company was all the rage. It appeared at the top of most "hot startup" lists, the Glassdoor reviews were 5/5, revenue was skyrocketing, and for a period in 2014 it became the fourth most valuable YCombinator company (after Stripe, AirBnB, and Drop…

If you can share, what was the dishonesty you're writing about? I can't tell if you're saying it was fraudulent dishonesty or self-delusion (where you think you're in a better position than you really are).

And do you know if the self-sever market was drying up for Optimizely in 2015? I assume they wouldn't abandon it if it was growing at a decent rate.

Re: Optimizely to be acquired by Episerver

#24

Post by gingerlime »

jakemcgraw wrote: post #6

Just kicked the tires on Optimizely for a site with less than a million MAU. They wanted $50K upfront for one year. No monthly or quarterly billing available. Went with Google Optimize instead, works fine for free. In the face of that, very surprised Optimizely doesn't do month to month to get folks started.

It's worse. They essentially kicked-out their existing self-serve customers in the process. We were on the (at the time) silver plan, but when we were ready to upgrade to gold, there was no gold, no silver, nothing... Just some super-expensive and vague enterprise plan.

But there's a silver lining: we created and open-sourced Alephbet[0] - a simple A/B testing platform together with a couple of backend options with AWS Lambda/redis[1] and couldn't be happier :)

[0] https://github.com/alephbet/alephbet

[1] https://github.com/Alephbet/lamed

Re: Optimizely to be acquired by Episerver

#25

Post by jameslk »

richardfeynman wrote: post #19

I worked at Optimizely from before its series A in 2012 until the end of 2016, so I have a unique perspective on this. For most of the time when I worked at Optimizely, the company was all the rage. It appeared at the top of most "hot startup" lists, the Glassdoor reviews were 5/5, revenue was skyrocketing, and for a period in 2014 it became the fourth most valuable YCombinator company (after Stripe, AirBnB, and Drop…

I wonder how Google Optimize factors into this. Provided its a free service, it seems like Optimizely may have had trouble offering something unique to the self-serve market over something that is completely free. Similar to how it seems Dropbox has less to differentiate itself from Google Drive and other similar services these days.

Re: Optimizely to be acquired by Episerver

#26

Post by dataminded »

I used their paid product once and failed to buy it two times after that.

They tried to move up-market and did it in an unreasonably difficult way in my opinion. It was easier to do business with ORACLE and then Google. The sales folks didn't listen, their proposals ignored our requirements, it was a mess.

I hope the staff got something.

Re: Optimizely to be acquired by Episerver

#27

Post by sharkweek »

richardfeynman wrote: post #19

I worked at Optimizely from before its series A in 2012 until the end of 2016, so I have a unique perspective on this. For most of the time when I worked at Optimizely, the company was all the rage. It appeared at the top of most "hot startup" lists, the Glassdoor reviews were 5/5, revenue was skyrocketing, and for a period in 2014 it became the fourth most valuable YCombinator company (after Stripe, AirBnB, and Drop…

Funny - I worked for two SaaS businesses that at one point used Optimizely and loved (and I mean LOVED) it.

But I distinctly remember at the second job, that incredibly rough transition to that vague enterprise pricing structure along with the software getting clunkier and clunkier, which led us to abandon them and never look back.

I think at one point they were trying to get us to go from paying $99 a month (!!!) to like $3,000 a month for virtually the same service??

Re: Optimizely to be acquired by Episerver

#28

Post by dataminded »

richardfeynman wrote: post #19

I worked at Optimizely from before its series A in 2012 until the end of 2016, so I have a unique perspective on this. For most of the time when I worked at Optimizely, the company was all the rage. It appeared at the top of most "hot startup" lists, the Glassdoor reviews were 5/5, revenue was skyrocketing, and for a period in 2014 it became the fourth most valuable YCombinator company (after Stripe, AirBnB, and Drop…

That's the phrase I was looking for. Their sales process is impossible.

Re: Optimizely to be acquired by Episerver

#29

Post by cosmie »

whoisjuan wrote: post #5

This sounds like a bad exit. From what I can tell the original Optimizely space has been slowly becoming a more discrete area of progressive delivery, rather than an industry on its own. Many players have jumped into this space with their own A/B testing and Feature Flags solutions as part of their total offering, many of those offerings being free, open source or cheaper. Also potentially better in the concrete task…

> One clear problem for Optimizely in this space is that experience optimization became a function of marketing departments through out the years but for a while they were positioning themselves as a developer tool. This go-to-market strategy opened a lot of opportunities for other players who saw a bigger market when selling the same type of solution to Marketing Departments.

I can't speak for all industries, but for the ones I'm familiar with, marketing is always the product owner of websites. With two practical implications being

1. The entire website costs (development + software vendors) ultimately get booked against their budget, so they have the true purchasing authority for pretty much all the website tech that isn't centrally mandated/controlled

2. Website projects (including budget and requirements planning) tend to start in marketing loooonnnggg before a tech resource gets brought in. So developer awareness/familiarity ends up moot, since there's too much incremental effort and cost involved for it to be easily get buy-in and added to the plan at this stage.

It makes a ton of sense to target your solution at them instead of developers. They may not be able to use your product well or do the implementation, but they're the ones with the purchasing authority and ability to ensure the budget accounts for it. And can add it into the project requirements far earlier in the planning stage than when tech resources get involved.

Re: Optimizely to be acquired by Episerver

#30

Post by martingoodson »

In 2014 I wrote an article on why Optimizely's approach to AB testing was statistically flawed [1]. I was working at a competitor so I needed to be a bit circumspect.

It was discussed here: https://news.ycombinator.com/item?id=7287665

I always wondered how they got away with it for so long.

[1] http://www.datascienceassn.org/sites/default/files/Most%20Wi...

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